Law Firms Update – November 2017 – French social security scheme and reporting reform

The reform of the “Régime Social des Indépendants” (social security scheme applicable to self-employed workers) by uniting with the general social security scheme presented in the Social security finance bill for 2018 (article 11) was voted by the French National Assembly on October 26, 2017.

As of January 1st, 2018, the RSI’s operating structures will be reorganized: the various RSI’s funds should be absorbed by the general scheme’s institutions (URSSAF for the contributions recovery, CPAM for illness and Carsat for retirement except for lawyers for whom the CBNF should remain the contact for retirement matters) in order to create an efficient one-stop shop for self-employed workers.

As regards to illness coverage, the management of this social security branch will be transferred to the CPAM mid 2020. However, as of 2019, salaried employees becoming self-employed workers will be covered by the general illness institution (CPAM).

In addition, retirement contributions periods will be taken into account by the general retirement scheme, whether made as salaried employee or self-employed worker.

However, the reform should not lead to an alignment between self-employed workers’ contributions and employees’ contributions, much higher. The impact of the reform should be limited to craftsmen and tradesmen since liberal professions have been contributing to the RSI for health coverage only.

The reform should not be effective before two years in order to avoid the dysfunctional situations occurred at the RSI’s creation in 2006.  The final institution should be set up on January 1st, 2020.

The French government also announced that self-employed workers’ tax and social reporting obligations should be unified by 2020. In this respect, an online platform should be set up in order to submit a single income return dispatched to both French social security (URSSAF at that time) and tax authorities.

The Social security finance bill for 2018 should also be voted by the French Senate before the Social security finance Act for 2018 is definitively adopted.

 

Your RHExpat Avocats contacts for self-employers’ individual income tax and social security :

Teddy Pal

Email : teddy.pal@rhexpat-avocats.com

 

Florence Deck

Email : florence.deck@rhexpat-avocats.com

 

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